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Wednesday, July 16, 2014

Does California’s possible break up offer a path to recovery for Illinois?

By Irene F. Starkehaus -

Entrepreneur and venture capitalist Tim Draper believes that the time has come to divide California into six individual states for the purpose of improving government accountability. His organization is currently labeling those regions as Jefferson, Northern, Central, West, South and Silicon Valley.

Government accountability? It's a radical idea, I know. In fact, it's an idea that has some elected officials in an absolute tizzy…not just in California but nationwide.

And any time establishment politicians have such a primeval reaction to a new idea, it ought to get the rest of us standing at attention, don't you think?

At first glance, breaking up California kind of looks like an extreme idea. Change the map? Change is hard for most of us, so I ask you to put aside the emotional scars that would occur over the loss of symmetry to Old Glory for just a moment because I promise you the chaos of having to rewrite Fifty Nifty United States will be overcome. Time heals all wounds.

If Tim Draper is successful in his undertaking, this is a proposal that the people of California will adopt for the long term financial stability of their state(s). It's an undertaking to which the voters of Illinois should be paying close attention because it could offer an alternative solution to our state's own financial woes too.

Actually, the resemblance between the current budget disaster in California and the parallel budget crises in Springfield is remarkable:

"Six Californias is our opportunity to solve the many problems we face today. ... Six states that are more representative and accountable. Six states that embrace innovation and strive to improve the lives of residents."

This resentment is not unlike that of the taxpayers living outside of Cook County; the people living in the proposed Jefferson, Northern, Southern and Silicon Valley regions of California feel underrepresented in the shadow of the State's controlling metropolises which tend to absorb tax revenue and resources into the black hole of state pensions.

Merced, Los Angeles, Kern, Sonoma, Orange, Contra Costa, Marin, San Joaquin, Imperial and Mendocino Counties are averaging 58% funding of their pensions. Seven of California's most economically vibrant counties are carrying three of the most inefficient counties through acts of wealth redistribution. California routinely harvests the output of those seven counties to shower the least productive citizens with wealth in exchange for votes.

More importantly, when you take the time to look at the income, population and revenue maps, you learn that Draper's quest is not at all about the 1% versus 99% as a number of California's political elite would like to characterize it. Rural areas that have the lowest median incomes are the most likely to favor divorcing themselves from the rest of the state.

Not too coincidentally, the cities with the greatest unfunded liabilities tend to be in the proposed "Central" and "West" states which land squarely at the center of the pack for average household income but would also be classified as the nation's most impoverished states if Draper's growing effort were to succeed. The disparity between producers and consumers is absolutely stunning when you break it down in this way. It makes for an interesting case study on the true effects of social justice for any energetic business leaders in Illinois who might want to start the drum beat for fiscal responsibility instead of perpetuating the state's corporate welfare system by paying protection money to the Made men of the Springfield hierarchy.

Just as there would be in Illinois, there are politicians in California that are against Draper's proposal. Per Fox News:

"This is a colossal and divisive waste of time, energy and money that will hurt the California brand," said Steven Maviglio, a Democratic political strategist who formed the group OneCalifornia to fight Draper's plan. "It has zero chance of passage. But what it does is scare investment away... at a time when the governor is leading us to an economic comeback."

Honestly, I'm not sure what California brand Mr. Maviglio thinks might be hurt by becoming fiscally responsible. He may have an overinflated opinion of California's reputation among the other states. If he means to continue protecting the cesspool of overregulation, over taxation and government waste, I believe his so-called brand is safe from the entrepreneurial blitz that would otherwise ensue with a return to free market principles.

What Tim Draper seeks to do is make government more local and therefore more accountable to the taxpayers of California, and for the proposed states that promise to reduce waste by shedding the weight of unfunded pension liabilities, this breakup promises an economic boom for four of the planned states. He believes it would create a more business-friendly environment, solve the state's water issues and ease traffic congestion.

In order to change the map of California, the proposal must be approved by the citizens of California before it is brought before Congress. The process for carving out a new state is outlined in Article IV, Section 3 of the Constitution. But again, beyond the basic challenge of creating these new states, there are those sentimental concerns regarding 20th century tradition as if our flag must live and die with fifty stars. Check out How the States Got Their Shapes for some fun and chaotic history about the development of our state borders.

When it comes to the map of America, adding states means for us the ability to innovate and grow; to meet the socio-economic needs of our citizens; to extend the American dream to as many people as will dream it. (I've often wondered if offering the Mexican people statehood would go a long way to solving any number of socio-economic problems that overwhelm both Americans and Mexicans.) The progressives of California, Washington (and yes, Illinois) are fond of the status quo because with the stagnation, they control the balance of power through the imbalance of income redistribution. Innovation for them is not as important as shuffling dwindling assets from column A to column B as a way of harvesting maximum votes.

One can almost see the telltale spare tire that goes along with the midlife crisis starting to permeate our culture. Our homegrown adventurers that dream of the next big ideas aren't encouraged or celebrated with nearly the energy that our innovations in extra-constitutional hijinks are. True, we'll pull an occasional Steve Jobs out of our national hat to illustrate the ingenuity of American entrepreneurs, but those success stories aren't as celebrated as are the successes of politicians for bringing home the dwindling bacon. To the best of my knowledge, no highways have been named after Mr. Jobs even though he more than paid his "fair share" to build them.

Side note - on December 21, 2011, Graphisoft company in Budapest presented the world's first bronze statue of Steve Jobs, calling him one of the greatest personalities of the modern age.

More important than the lack of recognition that our greatest visionaries receive, Americans deliberately turn our gaze away from an economically rising Asia, unwilling to acknowledge that the innovations brought about by the dreams of Mr. Jobs can't even be built in America for all the government intrusion and collectivist twaddle that gets in the way.

In a modern world, Thomas Jefferson would never have considered the Louisiana Purchase because it might upset the balance of power in favor of American Exceptionalism. JFK would not have been bothered celebrating the exploration of space because he would have been too focused on the exploration of private sector payment methods for innovative abortion and sterilization techniques. Ronald Reagan would never have dared the Evil Empire to "tear down this wall" for fear that the Godless communists might become piqued and stop financing our national debt.

That is where the stagnation of good old boy politics has gotten us and to that point, any breakup of this suffocating governmental monopoly is for the betterment and long term economic health of our nation.

Funny, our representatives knew exactly what to do when they perceived that Ma Bell was getting too big for her britches. Isn't it odd that they fail to turn that same critical eye on themselves when it's clear that their own power is out of control?

Comments

Does California’s possible break up offer a path to recovery for Illinois?

By Irene F. Starkehaus -

Entrepreneur and venture capitalist Tim Draper believes that the time has come to divide California into six individual states for the purpose of improving government accountability. His organization is currently labeling those regions as Jefferson, Northern, Central, West, South and Silicon Valley.

Government accountability? It's a radical idea, I know. In fact, it's an idea that has some elected officials in an absolute tizzy…not just in California but nationwide.

And any time establishment politicians have such a primeval reaction to a new idea, it ought to get the rest of us standing at attention, don't you think?

At first glance, breaking up California kind of looks like an extreme idea. Change the map? Change is hard for most of us, so I ask you to put aside the emotional scars that would occur over the loss of symmetry to Old Glory for just a moment because I promise you the chaos of having to rewrite Fifty Nifty United States will be overcome. Time heals all wounds.